Saksham Traders Through Its Proprietor Rahul Dubey vs. Idbi Bank

Held

The Court held that the decisions in Malcolm Murayis and Archana were applicable mutatis mutandis to the present case. The Court directed that the disputed amount of Rs. 2,97,073/- be kept in a Fixed Deposit (FD). The Court further directed that if any other complaint is received by the bank regarding another entry, the bank may take appropriate action in accordance with law, keeping in mind the Standard Operating Procedure (SOP) issued by the Government, as discussed in the Archana case. The disputed amount shall be allowed to be liquidated only after orders are passed by the competent Judicial Magistrate within three months. If no such orders are passed within this period, the amount kept in FD may be allowed to be withdrawn by the petitioner under intimation to the Police agency. Crucially, the bank account of the petitioner shall be unfrozen, and the petitioner shall be permitted to operate the account. The Court did not expressly leave any issue undecided.

Facts

The petitioner, Saksham Traders, through its proprietor Rahul Dubey, filed a writ petition seeking a direction to unfreeze its current bank account held with IDBI Bank, Ujjain, to allow operation. The petitioner contended that its case was covered by previous judgments of the High Court, specifically Malcolm Murayis & Ors. Vs. State Bank of India and Others (W.P. No.1100 of 2024) and Archana Vs. The State of Madhya Pradesh and Others (dated 27.07.2026). The bank had frozen the account based on intimation from cyber cell police stations alleging involvement in cyber fraud. The petitioner argued they had not received any notice and were lawfully conducting business, suggesting a third party might have used their account. The disputed amount in this specific petition is stated to be Rs. 2,97,073/-.

Key Issues

1. Whether the High Court, in its writ jurisdiction under Article 226 of the Constitution of India, can direct the unfreezing of a bank account that has been frozen by a bank based on instructions from cyber cell police stations alleging involvement in cyber fraud, particularly when the account holder claims innocence and lawful business operations? (Premised on Article 226, Article 19(1)(g), Article 300-A of the Constitution of India and Section 102 of Cr.P.C.). Petitioner's Arguments: The petitioner argued that their case is squarely covered by the High Court's previous decisions in Malcolm Murayis and Archana, which provided relief in similar situations. They contended that they were not issued any notice regarding the alleged fraud and that their business was legitimate. They relied on the principle that bank accounts should not be frozen mechanically and that only necessary restraint should be imposed for investigation. Revenue/State's Arguments: The judgment does not record specific arguments from the revenue or state. However, the banks' submissions in the cited Malcolm Murayis case indicated they froze accounts only upon instructions from cyber cell police stations and were bound by such directives. The SOP discussed in Archana highlights the role of investigating agencies and grievance redressal mechanisms.